Meat co-operative Alliance Group has indicated it is unlikely to be interested in a merger with Silver Fern Farms and rural servicing company, PGG Wrightson, under current proposals.
After a board meeting on Thursday, Alliance chairman Owen Poole said it has significant reservations about the planned partnership between Silver Fern Farms and PGG Wrightson which would involve the latter buying a 50% stake in Silver Fern.
The two companies say the partnership plan would provide the impetus to bring other firms on board, satisfying farmers' calls for a more consolidated meat industry.
However, Mr Poole has concerns about the hybrid company that is proposed, including its governance, and loss of farmer ownerhip and control.
He says Alliance has had experience with a hybrid model, and found it difficult to reconcile competing demands.
The co-operative holds its next round of meetings with farmer shareholders in August.